1. How Modi government will use GeM to cut corruption in India and its online marketplaces

How Modi government will use GeM to cut corruption in India and its online marketplaces

GeM is the Modi government's mandatory e-marketplace to source goods and services, and it applies to all departments and ministries. Government e-marketplace is a move aimed at bringing in more transparency and streamlining the government procurement.

By: | Published: May 29, 2017 4:45 PM
E-commerce is a fast-growing industry in the country, and it lies at the centre of PM Narendra Modi’s Digital India reform campaign. (Image: PTI)

GeM is the Modi government’s mandatory e-marketplace to source goods and services, and it applies to all departments and ministries. Government e-marketplace is a move aimed at bringing in more transparency and streamlining the government procurement. Meanwhile, e-commerce giants Flipkart and Amazon are in the fray to manage the GeM portal, according to an ET report. The Commerce Ministry last year launched the government e-marketplace (GeM) for online purchase of goods and services by various central government ministries and departments. The Finance Ministry had amended the General Financial Rules (GFRs) as per which it is now compulsory to procure items and services from this portal, an official had said. With increased transparency and ease of buying, Modi government’s initiative clearly aims to curb corruption in procurement services in India. The government has also introduced the requirement of registering on the portal with Aadhar card, PAN card and other identification systems to ensure further security. The system is basically designed to leave a digital trail, which has the capability to bring more openness in India, which is globally ranked 76th on Transparency International’s corruption index.

E-commerce is a fast-growing industry in the country, and it lies at the centre of Modi’s Digital India reform campaign. The GeM portal could support trades worth 20 percent of India’s GDP if all kind of services goes online, according to Vishal Singh, additional director at the National e-governance division, that had set up the platform. After the announcements of the demonetisation move by PM Modi, the government has a lot riding on online markets. According to several studies, e-commerce market is likely to grow 10-fold in next five years to reach $100 billion on the back of increasing penetration of Internet, smartphones and spread of digital network in rural areas. This means it is highly imperative that the government takes such initiatives to make sure that the newly growing sector is secure and corruption-free. PM Modi has said, “The government is committed to curbing corruption. One of the key aspects of this objective is to minimise government’s human transactional interface.”

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The government clearly wants to ensure that public procurement is being transformed by leveraging technology such as online marketplaces and e-tendering. The GeM essentially has other advantages like minimised prices, maximised ease of buy and sale, transparency and efficiency. This system will necessarily help enhance processes by methods like ‘demand aggression’, ‘real-time price discovery’ and ‘automated payments’. Minister of State for Commerce and Industry, Nirmala Sitharaman, has said, “GeM represents our government’s firm commitment to bring greater transparency and efficiency in public procurement.

A few reasons why the system will increase transparency

From the buyer’s point of view
1. Buyers can search, compare, select and then buy the goods after full verification.
2. A continuous vendor rating system will enable buyers to know about the goods before purchase.
3. With increased ease of buying, verifying goods will be an easier task.
4. A dashboard for buying and monitoring supplies and payments and its user-friendly nature will make purchase system more regularised.

From the seller’s point of view
1. Sellers will have direct access to all government departments.
2. One stop shop for marketing will ensure better monitoring.
3. Similarly, it is a one stop shop for bids, reverse auction on products and services.
4. Dynamic pricing based on market conditions will make sure that everyone knows about the market value of goods.
5. A dashboard for selling and monitoring of supplies and payments and its seller friendly nature will make the selling system more regularised.
6. All of these together ensures a consistent and uniform purchase procedure.

Meanwhile, earlier Congress spokesperson Randeep Surjewala had alleged corruption in GeM. He had also urged Prime Minister Narendra Modi to order a probe after eight BJP MPs, including a minister, complained of a ‘major scam’, according to a PTI report. Last week, the report added that, Nirmala Sitharaman had dismissed the allegations about corruption in the government e-marketplace (GeM) portal saying they are ‘false, baseless, motivated and malafide’. The allegations of corruption, she said, ‘appear to be a handiwork of certain interested groups who are badly hit owing to discontinuation of rate contracts…It is unfortunate that the Congress party is supporting an opaque system and is against transparency in public procurement’.


Surjewala had also stated that the charges of corruption have been levelled not by the Opposition but by the BJP MPs including Union Minister Faggan Singh Kulhaste in a letter to Sitharaman. Responding to these charges, Sitharaman said that on inquiry it was found that the two letters were forged, while the other letters of MPs favoured the continuation of rate contracts of certain products.

However, as of now, based on recommendations of Group of Secretaries, Government’s decision to create a one stop Government e-Marketplace (GeM) to facilitate online procurement of common-use goods and services will enhance transparency, efficiency and speed in public procurement. With more tools of e-bidding and reverse e-auction as well as demand aggregation will facilitate the users to get the best value for the money.

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